Can you be streamlined?

Deidra's Story

Aug. 14, 2013

Written by

Dan McGookey

Deidra received her foreclosure complaint several months ago. We soon discovered that her mortgage, like many in the country, is owned by Fannie Mae.

In fact, Fannie and its cousin Freddie Mac, own or insure 90 percent of this nation’s home mortgages. Thus, when those entities made a change in their rules recently, the ramifications for American homeowners struggling for mortgage relief can be truly significant.

The change which we are referring to is called the “streamlined mortgage modification”. What this means is that, qualifying homeowners may obtain mortgage relief without submitting the mountains of paperwork previously required.

At best, this paperwork requirement took months and sometimes years before the bank (actually a loan servicer) rendered a decision regarding a permanent loan modification.

Now, to borrow a metaphor from the game Monopoly, the financially stressed homeowner can “can pass Go and collect $200”, in the sense that all one needs to do is complete three trial period plan payments to qualify for a permanent loan modification.

Deidra is our first client to be offered the streamlined modification. Without having to go through the absolute torture of gathering up about every financial document imaginable, Deidra’s bank made her the following mortgage modification proposal:

Old Loan Terms / Loan Terms after Offer

Interest Rate: 6.5 percent / 4 percent

Monthly Principal and Interest Payments: $ 472 / $261

Total Monthly Payment (including taxes and Insurance): $678 / $ 467

For the millions of Americans who attempted for years to gain a break on their mortgage by sending in a never-ending stream of financial information to their bank, only to come up empty-handed by not achieving their goal, we hope Deidra’s story will come as one of hope and change.

Because it is profitable for banks to foreclose, they systematically abused the mortgage relief application process, turning it into nothing but a means of preventing that relief, no doubt many times leading to the loss of a family’s home.

If you are struggling in making your mortgage payment, be aware that you may qualify for a streamlined modification, possibly making the difference between saving or losing your home.

Kathryn Eyster and Lauren McGookey contributed. If you have questions or comment regarding this or any Foreclosure Story article, please visit www.mcgookeylaw.com.